Are You Covered?

Amidst the continued attempts to repeal or defund Obamacare, California is moving ahead with Covered California, the new state-run health insurance exchange, which could have a major impact on Californians’ health care insurance options.  It is important for you to be aware of the provisions of Obamacare that apply to you, particularly if you are not currently covered by any health insurance plan.  It is possible that you may qualify for free coverage under the expansion of Medicaid (Medi-Cal in California) or a subsidized plan in the exchange.  Failure to obtain health insurance will result in penalties beginning next year.

Beginning next year, individuals under the age of 65 who receive less than approximately $15,850 per year in income will be eligible for Medi-Cal.  The income amount increases as family size increases.  Previously, single adults without dependents who were between the ages of 21 and 65 were generally not able to qualify for Medi-Cal unless they were disabled or blind.  These restrictions left millions of Californians without affordable access to health insurance and without the safety net promised by the Medicaid system.  Now, however, many of these individuals will qualify for the free program to ensure access to medical care when needed.  Furthermore, for these individuals assets will not be considered in determining eligibility!  However, for individuals who are over age 65, the current eligibility rules continue to apply and planning for Medi-Cal eligibility through the use of a QMap Trust may still be the best option.

For those whose incomes are above the Medi-Cal threshold, uninsured adults may participate in the health insurance exchange, called Covered California.  Beginning October 1, an open enrollment period will run through next March, during which uninsured adults may determine whether they qualify for tax subsidies, what plans are available, and how much they will have to pay in premiums.  Individuals may only enroll during open enrollment periods; as a result, failure to enroll in an insurance plan during this time will result in a penalty, unless another individual plan is purchased instead.  The penalty is a hefty one: $95 per person or 10% of annual income, whichever is higher.  The penalties will increase in future years.

If you own a small business, Covered California will also provide additional options for purchasing insurance for your employees.  Businesses with fewer than 50 full-time employees, (which is determined through a calculation rather than simply adding up full-time workers) are eligible to participate in SHOP (Small Business Health Options Program).  SHOP is a parallel marketplace run by Covered California that will offer insurance plans to small businesses that are not required to purchase insurance through Obamacare in order to provide a more cost-effective option.

Military individuals who receive health coverage through TRICARE or through the VA meet the minimum coverage requirements.  Additionally, individuals who already have health coverage may maintain that coverage.  If you have questions about whether Obamacare’s implementation affects your QMap or QVap Trust or your eligibility for the programs, it is wise to ask during your next trust review appointment!

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